Manufacturing News

Hyundai may buy Chinese batteries amid political tension

Hyundai Motor Co. said Wednesday that it may buy batteries from Chinese companies for a planned China plug-in hybrid after South Korean battery makers failed to make a list of approved vendors last year.

The decision comes amid growing concern in South Korea that Beijing may be retaliating over Seoul's decision to deploy a U.S. anti-missile system. China argues the defense system could undermine its security.

Hyundai Motor said it was considering a Chinese battery for a plug-in hybrid version of its Sonata sedan to be sold in China.

"Considering various factors in Chinese market and price competitiveness, Hyundai Motor Company is also looking at cooperation with Chinese battery suppliers," the company said in a statement to Reuters.

It declined to comment on reports that its decision was because of tension with Beijing over the U.S. Terminal High Altitude Area Defense system.

Last year, Beijing declined to award battery certification to LG Chem and Samsung SDI Co. That decision could exclude the South Korean battery makers from state subsidies and erode their price competitiveness.

"As a company which has to sell vehicles in China, we have no choice but to consider a China battery maker under the current conditions," said a Hyundai source.

The current Sonata plug-in hybrid, sold in South Korea and the United States, uses a battery made by LG Chem.

Hyundai also said it now plans to launch the Sonata hybrid in China in 2018, a year later than previously planned, without elaborating on the reason for the delay.

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